Nutanix plots a second act in the hybrid cloud
Data Centre & Storage Solutions

Nutanix plots a second act in the hybrid cloud

For Nutanix CMO Howard Ting it’s a pretty big day. The datacentre disruptor is holding a partner/customer day in London and the financial scribes are writing stories based on the fact that it’s the end of the lock-up period – for many people, the first day when their shares can be turned into currency since the firm went public at the end of September last year.

“It’s clearly a milestone investors look at because there’s a natural pressure on the stock,” he says. “It’s also a good buying opportunity and obviously it matters to some employees because it’s their first opportunity to cash in.” As it turns out the stock dips, but not too alarmingly, and the whisper around the riverside hotel venue is that most folks close to the company will hold on until a significantly higher price to be hit. At time of writing, Nutanix retains a market cap of well over $2bn, earned by taking chunks out of the market away from some of the world’s biggest IT companies such as IBM, HP, HDS and EMC via a new approach that funnelled compute, storage, networking and complementary capabilities into unified appliances.

“You have to look at the long term,” Ting says. “Facebook was down [in share value] and look at them now. The way to maximise wealth is to let the full story unfold.” Reader advisory: stocks can go down as well as up…      

 

Staying focused

Going public is a big change for any business and following that blinking ticker index and the need to appease stock influencers can hypnotise executives to make strange decisions but Nutanix gives every indication of being a long-term player rather than a one-hit wonder.

“It’s a scorecard [on business performance] but it can be distracting,” Ting confesses. “But I don’t think any of the metrics that we track have changed. It takes a lot more thick skin because you should see some of the emails we see form investors and even internally.” Happily, for Ting, the recent birth of his first child should be a useful antidote to the craziness of Wall Street masters of the universe and obsessing over share price bumps.

One indicator that is garnering attention within the walls of Nutanix’s Silicon Valley headquarters is penetration of the Global 2000. The company had $182m in revenue for its most recent quarter but Ting is already thinking of the next markers beyond hitting that totemic $1bn mark.

“To go from $1bn to $5bn you have to be successful at large accounts,” he reckons. “We’ve always had some business there but it has to be a bigger part of our business.” Adding customers is always nice of course but for Nutanix the larger opportunity is probably to grow wallet share in those bigger accounts.

The competition? Ting feels that the giants that have tried to out-Nutanix Nutanix with their own hyper-converged products have also tried to relegate the space to a niche but he and his colleagues want to make Nutanix the default solution for big server workloads like core database, applications and ERP installations.

 

Rising up

Moving up the curve will necessarily mean some course correction in terms of Nutanix’s own infrastructure. There’s more segmentation in the sales organisation beyond the blunt weapon of splitting by geography and the company is also spending more time with consultants to open doors to vertical sectors and is keen to build links to the big services firms.

It’s also about smarter sales and service. “We’re living in a prediction economy,” Ting says, “and the winners and losers will be the ones that predict the best. Obviously in financial services you have the huge quant models and now it’s happening everywhere. IT needs to get more predictive and we have to know when a customer needs to hear from us and what they need to hear.”

Nutanix’s revenue rocket rise has garnered plenty of attention but the media focus on hyper-convergence has probably led to some over-simplification of what the company is up to. Beyond squeezing multiple capabilities into a server appliance Nutanix is really selling a platform or as Ting puts it “a new OS for the cloud era” where admins get a panoramic view of their datacentres and a control plane. A quarter of Nutanix units are now shipping with the Acropolis hyper-visor (look, no VMware!) while network orchestration, micro-segmentation, failover and hot-pluggable extra RAM and CPU capacity for workloads are all here or imminent. Meanwhile the Prism management plane continues to evolve with deeper capacity planning, forecasting, dashboards and visibility into what’s going on in networks, VMs, storage and hypervisors.

 

Risky business

It seems to me that, having made its name in the hyper-converged private cloud, Nutanix’s overarching plan is to do for the hybrid cloud what AWS does for the public cloud – provide a comprehensive stack and always-evolving platform to control pretty well any datacentre need. Prism is almost as audacious with Nutanix jostling to be the “single pane of glass” managing systems. Little wonder that Nutanix’s marketers now prefer the tag Enterprise Cloud and seem to be relegating the ‘hyper-convergence’ moniker it helped to add to the IT lexicon.

It won’t be easy and the big picture can look as confusing and complex as the Risk board game. As an example, in hypervisors Nutanix provides an effective alternative to VMware as well as supporting its rival. VMware is now part of Dell, which is a successful reseller channel for Nutanix but also has directly competitive products from its VCE franchise that is now part of the Dell EMC Converged Infrastructure group. VMware is cosying up with AWS. Another desktop/storage/server giant, Lenovo, also resells Nutanix. It’s enough to make a person lie down and apply a cold compress to the brow but that’s the way the cookie crumbles in this digital version of Game of Thrones or Smiley’s People that is modern technology industry politics – keep your friends close and your enemies closer… but which is which?

As well as sprinkling in the Enterprise Cloud name, Ting wants to distinguish Nutanix from what he calls, with a tinge of disparagement, “the box companies” – that is, those that have some form of converged appliance but no bigger play. Providing the best possible environment for dealing in the hybrid cloud is, he says, “the second act of the company”. If Nutanix pulls that off, then the folks who weren’t tempted to sell their shares might see a pretty return.

 

Also read:
CMO Files – Howard Ting
Nutanix CEO downplays Trump
World watches Nutanix, waits for IPO chill to end
Nutanix gains on demand for Google-like datacentres
PernixData applies VMware thinking to storage
Nutanix CEO cagey on mooted IPO

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Martin Veitch

Martin Veitch is Editorial Consultant for IDG Connect

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